PG&E Expands Net Metering

Yesterday saw a surprisingly positive new chapter in California’s net metering saga roll out. PG&E is voluntarily expanding its net metering program in the absence of new legislation that would mandate such a move. PG&E customers can continue to explore solar as a valuable investment for some time to come now–without this move, many were predicting that PG&E would reach its net metering cap by first or second quarter 2010.

The broad situation is this: California electric utilities are rapidly approaching the mandated cap for the percentage of their energy portfolio that can be supplied by the electricity garnered from net-metered solar projects (2.5 percent of peak demand). Once that cap is reached, the utilities are no longer required give home or business owners credit on their electric bill for any net excess electricity generated by their solar panel arrays. PG&E is raising that cap within their own portfolio to 3.5 percent. The reason this comes as such as a surprise is that the utility was one of the strongest voices in opposing a legislated net metering increase earlier this year (failed House bill AB 560).

Net metering is one of the cornerstones of any incentive package for solar, and is a huge part of the reason projects can be financially attractive–in essence, the utility is acting as a giant, completely efficient battery. Net metering ensures that every kilowatt-hour of electricity generated by your solar panels is helping offset your grid-purchased electricity, either by directly reducing the amount of energy you need to purchase (because you’re producing it on-site) or by offsetting the energy you do still need to purchase (by means of credit on your bill).

So, to make a short story probably longer than you feel up to reading on a Friday afternoon, PG&E’s announcement yesterday to voluntarily expand their net metering program came as a huge relief to the solar industry, and its timing could not have been more apropos as Solar Power International, the country’s largest solar conference, finished up in Anaheim.